Investing.com - The Australian dollar slipped against the U.S.
dollar on Wednesday, backing off three-week highs hit in the
previous session after a shift in the Reserve Bank's monetary
policy stance sparked a rally.
AUD/USD hit session lows of 0.8874 and was last down 0.44% to
0.8886. The pair rose to highs of 0.8940 on Tuesday, the strongest
since January 15.
The pair was likely to find support at 0.8850 and resistance at
Demand for the greenback was supported as investors remained
wary in the wake of a broad based selloff in emerging markets.
Emerging markets rebounded on Tuesday, recovering from their
sharp selloff in the past two weeks, with the Turkish lira and the
South African rand rising more than 1% against the dollar.
Emerging markets have been hard hit by concerns over the impact
of reductions to the Federal Reserve's stimulus program and worries
over a possible slowdown in China.
The Aussie's losses were held in check after the Reserve Bank of
Australia shifted its policy stance away from easing rates on
Tuesday, citing higher than forecast inflation.
The RBA left rates on hold at 2.5%, saying "the most prudent
course is likely to be a period of stability in interest
Elsewhere, the Aussie was sharply lower against the safe haven
yen, with AUD/JPY dropping 0.96% to 89.84 and edged higher against
New Zealand's dollar, with AUD/NZD rising 0.12% to 1.0835.
In New Zealand, data overnight showed that the labor market
strengthened in the fourth quarter.
Statistics New Zealand said the number of people employed in the
three months to December increased by 1.1% or 24,000, after an
additional 28,000 jobs were created in the third quarter. Market
expectations had been for an increase of 0.6%.
The unemployment rate fell to 6.0% in the fourth quarter from
6.2% in the previous quarter, in line with market expectations.
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